1933 was an outstanding year. Construction of the Golden Gate Bridge began; the original King Kong movie premiered at Radio City; Newsweek Magazine was published for the first time. President Franklin D. Roosevelt uttered his famous quote “The only thing we have to fear, is fear itself,” and he gave Americans one less thing to fear when he signed the Banking Act of 1933, which established the Federal Deposit Insurance Corporation (FDIC).
Today, the FDIC website tells us that “the Federal Deposit Insurance Corporation (FDIC) is an independent agency of the United States government that protects the funds depositors place in banks and savings associations. FDIC insurance is backed by the full faith and credit of the United States government.”
Funds in deposit accounts – including checking, savings, club accounts, money markets and certificates of deposits – are generally covered up to $250,000 per depositor at each insured bank. The FDIC has also temporarily provided unlimited coverage on non-interest bearing transaction accounts from December 31, 2010 through December 31, 2012.
This coverage is provided by the Deposit Insurance Fund, which is funded through premiums paid by banks, not by tax dollars. For example, in 2010 Susquehanna Bank contributed almost $17 million for FDIC insurance.
It is important that you know whether or not you are fully covered by FDIC to protect your hard-earned money. Here are some things you should know:
- The ownership and amount on deposit in all of your accounts at all banks that you do business with.
- Mutual funds, stocks, bonds, annuities and other non-bank financial products are not FDIC insured.
- No depositor has ever lost a single penny of FDIC-insured funds.
So how do you determine whether or not all of your funds are covered? The FDIC provides us with a tool called EDIE (Electronic Deposit Insurance Estimator). We love acronyms in the financial services industry! We also love to be of service to you. So we’d be happy to help you understand FDIC coverage and also what deposit account options are best for you. If you have questions, just talk with your local banker the next time you visit.
What questions do you have about FDIC deposit insurance coverage?